Property Renovation/Conversion Request

The borrower may not make any changes to the use of any part of the mortgage property without Fannie Mae’s prior approval unless allowed by the mortgage loan documents or required by applicable law. Examples include conversion of individual dwelling units or common areas to commercial use, conversion of a clubhouse to a daycare center, or changing the floor plan of the units.

The table below lists the key points to consider in reviewing a property renovation/conversion request.

Guide Reference

Not applicable

Delegation Criteria

Fannie Mae must approve all borrower requests for property renovation, conversion, or rehabilitation.


Address the following questions in the request you submit to Fannie Mae.

  1. Has there been an event of default or does any condition exist, which is likely to result in an event of default?
  2. Will the borrower obtain all necessary permits and approvals from all governmental agencies that have jurisdiction over the property?
    • Permits and approvals must be obtained at the borrower’s expense.
    • The borrower must submit proof that the building and improvements would not be in violation of any governmental codes or regulations including building codes, zoning laws, regulations, and density rules after the proposed construction, and that the property can be restored in the event of a casualty.
  3. Will the costs and expenses associated with the proposed construction of additional units be paid by the borrower? Such costs may include, but are not limited to appraisal fees, your review fees and costs, and your attorneys’ fees.
  4. Does the borrower have a construction loan? If so, who is the construction lender? What is the maturity date for the construction loan?
  5. What is the amount of the construction loan? Who will monitor and administer the funds?
  6. Will the borrower, interest in the borrower and/or asset serve as collateral for the construction loan?
  7. Will anyone other than the borrower guaranty the construction loan? What is the collateral support for the construction loan?
  8. What is the anticipated cost and time-frame for completion of improvements?
  9. How will the existing parcel be affected by the borrower’s plans to plat or re-plat the property to support the construction?
  10. Will the borrower be able to guarantee a lien-free completion of the construction?
  11. Does the borrower have the necessary experience to complete construction in a timely and efficient manner?
  12. Will construction of any improvements have a negative impact on the use and enjoyment of the remaining property, including visual impact, access, etc.?
  13. If the borrower has not done so already, it will need to certify that the proposed improvement will be used to provide multifamily housing and that for any other future use, the borrower will submit a request to Fannie Mae in advance of any changes.
  14. Will the borrower obtain builder’s risk insurance?

What to Submit

Submit the following to Fannie Mae with your request:

  • Copy of the borrower’s request
  • Copies of all other agreements in connection with the request, if applicable
  • Servicer’s narrative
    • Property name and address
    • Fannie Mae loan number
    • Reason for the request
    • Analysis of the current financial condition of the property, as well as the impact of the proposed changes on the income and marketability of the property
    • Your recommendation

How to Submit

Generally: [email protected].

Structured Facilities*
(Credit Facilities and Bulk Deliveries): [email protected]

Seniors Housing*: [email protected]

Hard Copy (if required by Fannie Mae)
Fannie Mae
Credit Services/Drawer AM
Mailstop 8H-607
3900 Wisconsin Ave. NW
Washington, DC 20016

*Please contact us at these e-mail addresses for requirements specific to these financing types.


To be determined by Fannie Mae.

Wire any fees due to Fannie Mae to the following account no later than 10 business days after you receive them. Include the type of fee or deposit, property name and Fannie Mae loan number.

ABA Number: 021 039 500
Telegraphic Abbreviation: FNMA/NYC
Account Number: 169220242
Note: Type of fee (Assumption or Partial Release), the Fannie Mae Loan Number and the Property Name.
Attn: Trans code 513 - GL 747669921

Use of Funds

Not applicable


If the request is approved, follow the terms and conditions provided in the Fannie Mae concurrence letter.

Unauthorized Renovation or Conversion

If you become aware that the borrower has undertaken a property renovation or conversion without your prior approval or that of Fannie Mae, follow the same process you would if the renovation or conversion had not yet occurred. Immediately, send the borrower a Reservation of Rights Letter (Form 4804). Send a copy of Form 4804 along with the items listed above under What to Submit to the applicable Asset Management mailbox. Fannie Mae will decide whether to approve the renovation or conversion or declare the mortgage loan in default.

Always consult the loan documents, transaction documents, your servicing agreement, the Multifamily Guide and the relevant forms for complete instructions.

© 2011 Fannie Mae. Trademarks of Fannie Mae.